Palm Beach County Home Sales Surge this Summer
There’s good news for Palm Beach home owners. Median home prices saw a 7% increase and sales were up 14% this past June. The news is reigniting hope that a housing recovery is underway in South Florida; however, low inventory of homes and high competition is continuing to be a frustration for buyers.
Many investors are coming in with all cash offers, scooping up the remaining inventory and leaving buyers who need traditional financing out in the cold. Supplies of single-family homes in Palm Beach County shrunk to five months in June, which is a 43% decrease from the same time in 2011. Incidentally, buyers don’t have the same variety to choose from, and many are left with just a few homes if they are lucky. Before real estate agents can even setup appointments for showings, the homes are going under contract.
But it’s not an isolated syndrome in Palm Beach County. Across the state of Florida, the inventory of single-family homes was down 40% in June, and median home sale prices climbed 8.2%. Sales volume was also up 5.3%. Around the country, prices crept up 8% from the same time a year ago and sales volume was up 4.5% too.
Despite the increase in sales volume, the seasonally-adjusted annual rate of 4.37 million is the lowest since October, and sales were projected to be at an annual rate of 4.62 million in June. Adds Real Estate Finance Professor Anthony Sanders from George Mason University, “It’s the biggest swing and miss in two years. As I have said repeatedly, this is going to be a partial recovery.”
Chief economist, Lawrence Yun, of the National Association of Realtors blames the decline in sales on low inventory. Nationally, total homes for sale fell by 3.2% from May to June to less than a seven-month supply. Yun notes, “Despite the frictions related to obtaining mortgages, buyer interest remains solid. But inventory continues to shrink and that is limiting buying opportunities. This, in turn, is pushing up home prices in many markets.”
But there is good news. The Commerce Department recently reported that builders have begun construction on the most new homes since October 2008, which means that more homes will be coming into the pipeline eventually. Additionally, asking prices continue to rise, signaling a renewed confidence among sellers. In Palm Beach County, homes averaged about 104 days on the market in June, an 11% decline from last year.
First-time home buyers have to be ready to move, and being pre-approved for a mortgage can help tremendously in the process. Otherwise, cash buyers tend to be next in line. All-cash sales accounted for 29% of home sales nationwide in June, and investors made-up 19% of those buyers whereas first-time home buyers amounted to 32%.
With low interest rates and some great deals to be had, it’s a veritable battlefield when it comes to real estate. Banks are taking their time to repossess homes and then put them back up for sale, and one fear is that if too many homes come onto the market at once, prices will crash again. So the message is clear: if you see something you like, don’t hesitate.
Interested in learning more about luxury real estate in Palm Beach County? Our team of expert real estate agents specialize in beach real estate and estate properties in Palm Beach County Florida. Please let us know if we can show you around.
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